Oil, climate change, and Patricia Espinosa’s short memory

Patricia Espinosa, Executive Secretary of the UNFCCC, was in Weimar, Germany this week. In her first speech since COP 24, she said that the UN climate meeting in Katowice reached an “extremely successful outcome”. Of course Espinosa doesn’t mean that the meeting was successful in addressing climate change. She just means that it was successful in continuing the never-ending farce of the UN climate negotiations.

Fossil fuels are not mentioned in the Paris Agreement. Keeping fossil fuels in the ground was not on the agenda in Katowice. As a result, any chance of the talks reaching any meaningful decisions about addressing climate change was close to zero.

Espinosa is, of course, fully aware that climate change is serious. “We are in deep trouble with climate change,” she says. She’s also fully aware that climate change is “quickly outpacing our efforts to address it and we must catch up before it’s too late.”

Espinosa refers to the 2018 UN Environment Program Emissions Gap Report, which finds that the current nationally Determined Contributions under the Paris Agreement will lead to global warming of about 3°C by 2100, with warming continuing after that date.

To make matters even worse, most countries are currently not meeting their own targets in the NDCs. Espinosa comments,

“The numbers don’t lie — they tell a painful truth: we are way off course.

“We need to change course. We need more climate action, more climate ambition, and we need it now. Not just from governments, but from all segments of society.

“We are literally standing at a critical turning point in human history: one where our actions today will have an incredible influence over how future generations will live.

Needless to say Espinosa makes no mention of fossil fuels in her speech in Weimar. The words oil and coal are entirely absent from her speech. The word gas appears twice. Both times as part of the phrase “greenhouse gas emissions”.

Espinosa tells her audience in Weimar that, “We had an extremely successful outcome at the recent international climate talks in Katowice, Poland.”

That statement beggars belief. Any meeting about climate change that fails to discuss how we are going to leave fossil fuels underground is an unqualified failure.

Patricia Espinosa’s short memory

Espinosa describes outcome of the Katowice negotiations as “a roadmap for the international community to decisively address climate change”.

Of course we’ve had climate road maps before. But Espinosa appears to have forgotten about the Bali Road Map, agreed at COP 13, eleven years ago. The UNFCCC describes it as “a set of a forward-looking decisions that represent the work that needs to be done under various negotiating ‘tracks’ that is essential to reaching a secure climate future.”

Espinosa also seems to have forgotten that in November 2018, she took part in Norwegian oil giant Equinor’s Autumn conference.

At the conference, Espinosa welcomed Equinor’s plans to buy REDD credits to “offset” its emissions. Obviously, she said nothing about the need to keep fossil fuels in the ground if we are to stand a chance of addressing climate change.

At conference, Eirik Wærness, Chief Economist and Senior Vice President of Equinor gave a presentation.

Equinor’s plans to make climate change worse

Wærness did not talk about climate change much in his presentation. He talked about macroeconomics and oil. He’s worried about geopolitical hotspots, impacts of foreign exchange movements, the impact on the price of oil on emerging economies’ growth, protectionism and sanctions, and immigration in a more uncertain world.

This was one of his first slides:

Wærness says,

We will see global GDP, global demand growing, driven in particular by the United States. But there are increasing and significant imbalances in the global economy, with increasing risks, also for global GDP growth going forward and in our case, we’ve ended up with finalising our forecast for 2018 at 3.1% global GDP growth, and going slightly down to 2.9% next year, and then again to 2.8% by 2020.

Wærness then turns to what this means for global oil demand:

When you look at the global oil demand curve, to the right, I mean we’re getting used to oil demand growth. And I guess if we have a slightly longer perspective it’s relatively hard for us that still can remember that that oil demand 20 years ago was 20%, or 20 million barrels per day, lower than it is today.

It’s an important perspective when you think about forecasts also looking at the possibilities of reducing oil demand going to 2030, 2040, 2050, we shouldn’t forget that just over the last 20 years it has actually increased by 20%.

And it has grown 14 million barrels per day since the financial crisis, which is only 10 years back.

So this is a significantly growing market, and getting out of oil, if somebody believed that is possible is going to take a lot of changes.

Wærness anticipates that higher oil prices, lower growth in emerging economies, and the strong dollar could result in a “slightly lower oil demand growth”.

But even this slightly lower oil demand growth is enough to make the Paris Agreement completely irrelevant.

If the UNFCCC is serious about addressing climate change, sooner or later it has to address the issue of leaving fossil fuels underground. A small first step in that direction would be to prevent massively polluting fossil fuel companies like Equinor from greenwashing its emissions by buying REDD credits.

In the meantime, Wærness’ presentation is proof (as if it were needed) that Equinor, the Norwegian government (which owns 67% of Equinor), and the oil industry generally, is not interested in addressing climate change. It is interested in postponing any structural changes to the industry, while superficially appearing concerned about climate change.